New Delhi, Aug 27: Major Indian business groups are stepping up their presence in the gold-backed lending market, seeking to tap rapidly rising demand for loans secured against household gold.
Aditya Birla Group, Tata Capital and Godrej Capital are among the large financial players entering or expanding their operations in the segment, reflecting growing confidence in the potential of gold-based credit.
Loans against gold have recorded strong growth in recent months. Data from the Reserve Bank of India showed that such lending increased by more than 42 per cent annually from March 2024, with growth accelerating to around 70 per cent year-on-year during May and June 2026.
The expansion has been supported by India’s large stock of household gold, which provides lenders with readily liquid collateral. Borrowers are also increasingly viewing gold loans as a mainstream source of credit rather than solely as an option during financial emergencies.
Recent regulatory changes have further shaped the sector. Higher permissible loan to value ratios and tighter credit-related requirements introduced in April have encouraged lenders to strengthen their underwriting and risk management practices.
Rating agency ICRA expects the sector to maintain strong momentum, projecting annual growth of around 35 per cent over the next two years.
The entry of large conglomerates is likely to intensify competition for established regional lenders. Bigger institutions can combine substantial capital resources, technology driven processes and wider distribution networks to attract customers.
The rapid expansion also highlights the increasing role of secured lending in India’s financial system, as institutions seek new opportunities beyond conventional personal and unsecured loans.